New steel expansion projects in China focus on BOF rather than EAF

Of all the companies with steel melting equipment listed in the Metal Bulletin Company Database, 75% use EAF technology (also known as mini-mills), 25% are BOF operations (also known as integrated steel mills). However, given the much larger average capacity of integrated operations, the relationship is inverted from a capacity point of view, with BOF accounting for 75% of capacity compared to EAF's 25%.

Metal Bulletin Company Database shows the prevalence of integrated operations in China. For this country the Database lists 50 BOF and 42 EAF operations, but, from a capacity point of view, BOFs account for 85% of the total, while EAFs for 15%. Carbon steel is by far the largest section of the BOF steel business with 96% of the BOF Chinese companies on the MB Company Database producing carbon steel semis, longs or flat products. 60% produce non-stainless alloy steel and 20% produce stainless steel. For EAF producers, alloyed steels are a more prevalent, with only 66% of the mills producing carbon steel, while 24% produce stainless and 35% of companies listed produce non-stainless alloy steels.

Companies with BOF operations in China

Anshan Iron & Steel (Group) Corp

Baosteel Group Corp

Lingyuan Iron & Steel (Group) Co Ltd

Panzhihua Iron & Steel (Group) Co

Taiyuan Iron & Steel (Group) Co Ltd (TISCO)

Anyang Iron & Steel Group Co Ltd (AISCO)

Baoshan Iron & Steel Co Ltd Special Steel Branch (Group) Co Ltd

Baosteel Group Shanghai No. 1 Iron & Steel Co Ltd

Baosteel Group Shanghai Pudong Iron & Steel (Group) Co Ltd

Baotou Iron and Steel (Group) Co Ltd

Beitai Iron & Steel Group Co Ltd

Benxi Iron & Steel (Group) Special Steel Co Ltd

Changzhou Zongtain Iron & Steel Co

Chengde Iron & Steel Group Co Ltd

Dazhou Iron & Steel Co

Delong Holdings Ltd

Fujian Sansteel (Group) Co Ltd

Handan Zongheng Iron & Steel Group Co Ltd

Hangzhou Iron & Steel Group Co

Hebei Dongshan Metallurgy Industry Co Ltd

Henan Jiyuan Iron & Steel Group Co Ltd

Jiangsu Shagang Group Co Ltd

Jiangxi Xinyu Iron & Steel Co Ltd

Jiangyin Huaxi Iron & Steel Co Ltd

Jianlong Group

Jinan Iron & Steel Co Ltd

Jinxi Iron & Steel Group Co Ltd

Jiuquan Iron & Steel (Group) Co Ltd (JISCO)

Laiwu Steel Group Ltd

Lengshuijiang Iron & Steel Group Co

Lianyuan Iron & Steel Group Co Ltd

Lianzhong Stainless Steel Corp (LISCO)

Maanshan Iron & Steel Co Ltd

Minmetals Yingkou Medium Plate Co Ltd

Nanjing Iron & Steel United Co Ltd (NISCO)

Rizhao Steel Group

Shandong Taishan Iron & Steel Co Ltd

Shanxi Highsee Iron & Steel Group Co Ltd

Shaoguan Iron & Steel Group Co Ltd

Shijiazhuang Iron & Steel Holdings Ltd

Shougang Changzhi Iron & Steel Ltd

Shuicheng Iron & Steel Group Co Ltd

Tangshan Guofeng Iron & Steel

Tianjin Tiangang Steel Group Co Ltd

Tianjin Tiantie Metallurgical Group

Weifang Special Steel Group Co Ltd

Wuhan Iron & Steel (Group) Corp (WISCO)

Xiangtan Iron & Steel (Group) Co Ltd (XISCO)

Xinjiang Bayi Iron & Steel Co Ltd

Xuanhua Iron & Steel Group Liability Co Ltd

Companies with EAF operations in China

Baosteel Group Corp

Taiyuan Iron & Steel (Group) Co Ltd (TISCO)

Baoshan Iron & Steel Co Ltd Special Steel Branch (Group) Co Ltd)

Baosteel Group Shanghai No. 1 Iron & Steel Co Ltd

Baosteel Group Shanghai Pudong Iron & Steel (Group) Co Ltd

Benxi Iron & Steel (Group) Special Steel Co Ltd

Changzhou Zongtain Iron & Steel Co

China Huadong Stainless Steel Group Co Ltd

China South East Special Steel Group Co Ltd

Guangzhou Zhujiang Steel Co Ltd

Hangzhou Iron & Steel Group Co

Hengyang Valin Steel Tube Co Ltd

HuBei Rising Technology Co Ltd

Hubei Xinyegang Steel Co Ltd

Huzhou Xinyaohua Stainless Steel Pipes & Tubes Co Ltd

Jiangsu Shagang Group Co Ltd

Jiangsu Xihu Special Steel Co Ltd

Jiangxi Xinyu Iron & Steel Co Ltd

Jiangyin Jinsong Stainless Steel Co Ltd

Jiangyin Xingcheng Special Steel Co Ltd

Jianlong Group

Ju Tai Special Steel Co Ltd

Jutai Special Steel Co Ltd

Laiwu Steel Group Ltd

Lianzhong Stainless Steel Corp (LISCO)

Nanjing Iron & Steel United Co Ltd (NISCO)

Nantong Baogang-Nippon Steel

Shandong Shiheng Special Steel Group Co Ltd

Shaoguan Iron & Steel Group Co Ltd

Shijiazhuang Iron & Steel Holdings Ltd

Sichuan Changcheng Special Steel (Group) Co Ltd

Sichuan Chuanwei Group Co Ltd

Suzhou Double Gold Industry Co Ltd

TBS Group

Tianjin Pipe (Group) Corp

Tianjin Tiangang Steel Group Co Ltd

Wenzhou Yucang Steel Industry Co Ltd

Wuyang Iron & Steel Co Ltd

Xinjiang Bayi Iron & Steel Co Ltd

Yongxing Special Stainless Steel Co Ltd

Zhejiang Jiangpu Stainless Steel Manufacturing Co Ltd

Zhejiang Youyi Special Steel Co Ltd

Globally, the BOF method accounts for approximately 71% of global steel production, while the EAF method accounts for approximately 28%. The remaining 1% of steel output is produced using a third production method now contracting. EAFs represent the fastest growing segment of steel production technology; having increased market share from approximately 15% to 28% during the past few decades.

The EAF method employs electricity to remelt scrap steel as its primary feedstock to produce steel and does not consume metallurgical coal. The blast furnace and BOF method, instead uses as main inputs coking coal and iron ore.

Normally, EAFs are smaller than BOFs, and they are characterized by lower overhead costs and offer a higher degree of flexibility with regards to production levels. However, EAF production is highly dependent on the availability of scrap steel and electricity. Therefore, the economic benefits of the EAF production process are also dependent upon geographic location, with proximity to scrap steel and low cost electricity being important driver for the choice of technology.

For its abundance of steel scrap and the availability of relatively inexpensive electricity, the United States are therefore one of worlds largest EAF steel producing. In China and India, on the other hand, integrated operations have thus far won the day as large demand favors high capacity plants and the Chinese relative lack of domestic scrap made an EAF-based industry inadequate to meet the huge Chinese demand for steel.

Only countries with a long history of industrialization scrap sufficient amounts of steel to run EAF operations. Additionally, in the most industrialised countries the period of decommissioning is shorter. Hence, scrap availability is not an issue for South Korea or Japan, as these Asian countries have a big shipbuilding industry, making EAF a more viable option there. In the case of China, the sheer size of the market means that, despite the countrys relative recent industrialisation, some big scrap players are already present. In 20 years time, EAF will grow in China and even bigger business opportunities will open up for scrap merchants and alternative irons (DRI and HBI) producers.

Scrap merchants in China

ASK Holdings Ltd

Central China Merchants Ltd

Fortune Steel Resources Ltd

Foshan Advance Trading Ltd

Foshan Nanhai Alco Metals Resources Ltd

Foshan Nanhai Meirui Metal & Plastic Co Ltd

Foshan Nanhai Minhao Metals Recycling Co Ltd

Good Year Corp Ltd

Langfan Langhe Stainless Steel Co Ltd

Million Link (Tianjin) International Trade Co Ltd

Nanhai Xinghai Metals Recycling Co

Nanhai Youlian Electrical Co Ltd

Ningbo Baidou Secondary Resources Recycling Co

Ningbo Baolong Resources Recycling Co Ltd

Ningbo Daye Metals Recycling Co Ltd

Ningbo Fajin Secondary Resources Co Ltd

Ningbo Gonghua Secondary Resources Co Ltd

Ningbo Hexing Metals Recycling Co Ltd

Ningbo Huamao Import & Export Co Ltd

Ningbo Taigang Metals Recycling Co Ltd

Ningbo Taiwa Recycling Resources Co Ltd

Ningbo Toptrade Import & Export Co Ltd

Ningbo Xiangfenghang Trading Co Ltd

Ningbo Xianghao Leibov Metal Industries Co Ltd

OneSteel Recycling Asia Ltd

Qingyuan Huaqing Secondary Resources Investment & Development Co

Qingyuan Mingyi Metals Co Ltd

Rankco Trading Ltd

Shanghai J. Sun Trading Consultants Ltd

Sinotrade Global Ltd

Sino-Trust Corp

Stemcor Hong Kong

Suzhou Huameida Aluminum Products Co Ltd

Taizhou Dingshen Metals Co Ltd

Taizhou Keelung Metal Co Ltd

Taizhou Qilong Resources Recycling Co Ltd

Tianjin Alltone Metal Co Ltd

Tianjin Bright Metal Products Co Ltd

Tianjin Meifu Metals Products Co Ltd

Tianjin NCU Metals Ltd

Tianjin Qiaohong Resources Reuse (Tianjin) Co Ltd

Tianjin Renli Metal Products Co Ltd

Tianjin Ruichen Metal Products Co Ltd

Tianjin Tongxin Secondary Resources Recycling Co Ltd

Tianjin Weida Metal Products Co Ltd

Tianjin Xiangshu Metal Products Co Ltd

Winmex Janhout Metal Ltd

Zhangjiagang Fengli International Trade Co Ltd

Direct reduced iron producers in China

Cargill Trading (Shanghai) Ltd

CMC China

Eldon Development Ltd

Falcon Resources Ltd

Hubei Skyland Metals Ltd

Mitsui & Co (Hong Kong) Ltd

Shanghai J. Sun Trading Consultants Ltd

Stemcor Hong Kong

For more information about the equipment used by steel producers in China, visit www.mbdatabase.com.

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